To what extent mesothelial-derived cells contribute to lung development and post-natal repair is an open and basic question for the field. The objectives of this grant are to address this fundamental issue and to assess the key role of the Wilm's tumor 1 transcription factor (WT1) in these events. Using mouse lines that carry WT1 alleles with a knock-in Cre recombinase and GFP genes, we generated preliminary data leading to 3 hypotheses that will be examined: 1) the fetal mesothelium contains progenitors for differentiated mesenchymal lung cells 2) WT1 controls the expression of key genes, such as hedgehog (Hh) pathway constituents that control mesothelial migration into the fetal lung, and 3) mesothelium-derived cells contribute to post-natal lung repair and re-growth. To summarize, we found that WT1 is selectively expressed in the lung mesothelium from E11.5 to E16 and is undetectable in the adult. We identified a similar temporal pattern of WT1 expression in the primate lung, suggesting a conserved mesothelial WT1 program across mammalian species. Lineage tracing showed that mesothelium-derived cells give rise to a substantial number of bronchial smooth muscle cells (BSM), along with other parenchymal lung cells whose identities will be established (Aim 1). We observed that WT1 expression coincides with mesothelial cell entry into the underlying lung and active Hh signaling. Mechanistically, we found that WT1 binds to the promoters of multiple Hh pathway genes in mesothelial cells, and that selective loss of mesothelial Hh signaling markedly attenuates entry into the underlying lung in association with diminished expression of EMT genes. These data point to a key role for WT1 in the fetal mesothelium, controlling pathways such as Hh signaling that are involved in migration and EMT, which will be further explored (Aim 2). Interestingly, preliminary data indicate that WT1 is reactivated during lung re-growth post-pneumonectomy whereas WT1 is not re-activated in inflammatory lung injuries, such as asthma and fibrosis. These findings suggest 2 models for how the mesothelium may contribute to lung remodeling in post-natal life. In model 1, the fetal WT1-regulated mesothelial program is re-activated. In model 2, parenchymal cells that arise from the fetal mesothelium in development contribute to repair. To what degree these models are involved in lung re- growth and remodeling in post-natal life will be further examined (Aim 3). We expect that completion of these studies will establish a firm foundation for future work in this new area of lung biology.